Tax Law (Questions About Taxes)/Farm selling

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Expert: John L. Tidwell - 1/23/2014

QuestionMY father passed four years ago. My mother is still living and has put the farm in mine and 3 sisters name we are in process of selling it. She has bought a trailer. Our plans are to pay it off and build her porches this spring. How are the taxes paid on this are we to divide four ways each file. Is what we use to pay on stuff for her not taxed then we divide whats left over and then pay taxes. Or can this be counted as inheritance which it is and do we pay taxes? Thanks just lot of questions

AnswerMs. Lynch:

When your mother inherited the property from your father she received it at one value. When she gave it to your brothers and sisters the value of the property for income tax purposes should have been stepped up to the current market value. If the value of the property is greater than $13,000 times the number of siblings your mother may have a gift tax problem. Please seek the advice of a local tax attorney or a local CPA. She has to gift the property to you for tax purposes.